Satisficing

Economics

In economics, satisficing is a behaviour which attempts to achieve at least some minimum level of a particular variable, but which does not strive to achieve its maximum possible value. The most common application of the concept in economics is in the behavioural theory of the firm, which, unlike traditional accounts, postulates that producers treat profit not as a goal to be maximized, but as a constraint. Under these theories, a critical level of profit must be achieved by firms; thereafter, priority is attached to the attainment of other goals.

The word satisfice was coined by Herbert Simon in 1957. Simon says that people are only 'rational enough', and in fact relax their rationality when it is no longer required. This is called bounded rationality.

Some consequentialist theories in moral philosophy use the concept of satisficing in the same sense, though most call for optimization instead.

Cybernetics (Artificial Intelligence)

In cybernetics, satisficing is optimization where all costs, including the cost of the optimization calculations and the cost of getting information for use in those calculations, are considered.

As a result, the eventual choice is usually sub-optimal as regards the main goal of the optimization, i.e. different from the optimum in the case that the costs of choosing are not taken into account.

Reference: Klaus Krippendorff's "A Dictionary of Cybernetics".

Social and Cognitive Psychology

In Social cognition, the Jon A. Krosnick theory of survey satisficing says that optimal question answering involves a great deal of cognitive work. Some people may shortcut their cognitive processes in two ways:

Weak satisficing: Respondent executes all cognitive steps involved in optimizing, but less completely and with bias.

Strong satisficing: Respondent offers responses that will seem reasonable to the interviewer without any memory search or information integration.

Likelihood to satisfice is linked to respondent ability, respondent motivation and task difficulty.

Regarding survey answers, satisficing manifests:

choosing explicitly offered no-opinion response option

choosing socially desirable responses

nondifferention when a battery of questions asks for ratings of multiple objects on the same response scale

acquiescence response bias, which is the tendency to agree with any assertion, regardless of its content

Decision Making

In decision-making, satisficing explains the tendency to select the first option given that can work for the situation rather than the “optimal” solution.

Example: One's task is to sew a patch onto a pair of jeans. The best needle to do the threading is a 4 in long needle with a 3 millimeter eye. This needle is hidden in a haystack along with 1000 other needles varying in size from 1 inch to 6 inches. Satisficing claims that the first needle that can sew on the patch is the one that should be used. Spending time searching for that one specific needle in the haystack is a waste of energy and resources.

Satisficing occurs in consensus building when the group looks towards a solution everyone can agree on even if it may not be the best.

Example: A staff spends hours projecting the next fiscal year's budget. After hours of debating they eventually reach a consensus only to have one person speak up and ask if the projections are correct. When the group becomes upset at the question, it is not because this person is wrong to ask, but rather because they have come up with a solution that works. The projection may not be what will actually come, but the majority agrees on one number and thus the projection is good enough to close the book on the budget.

References

Holbrook, A.; Green, M.; Krosnick, J. 2003. "Telephone versus face-to-face interviewing of national probability samples with long questionnaires - comparison of respondent satisficing and social desirability response bias." Public Opinion Quarterly, Vol 67, 79-125.
Krippendorff, Klaus. "A Dictionary of Cybernetics."
Krosnick, J. 1991. "Response strategies for coping with the cognitive demands of attitude measures in surveys." Applied Cognitive Psychology. Vol 5, 213-36.

External links

Web Dictionary of Cybernetics and Systems definition of "satisficing"
Michael Byron. Satisficing and Optimality. Ethics 109 (1998): 67-93. A paper on satisficing considered from a philosophical viewpoint.

Economics | Heuristics | Organizational studies and human resource management

Satisficing (Entscheidungsfindung)